BlackRock Launches Tokenized Asset Fund on Ethereum, Invests in Fund’s Tokenization Platform Securitize

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Published: March 21, 2024 at 4:25 am Updated: March 21, 2024 at 4:25 am

Edited and fact-checked:
March 21, 2024 at 4:25 am

In Brief

BlackRock launched USD Institutional Digital Liquidity Fund on Ethereum represented by BUIDL token to offer daily yield to token holders.

Investment company BlackRock officially launched its tokenized asset fund on the Ethereum (ETH) network. The BlackRock USD Institutional Digital Liquidity Fund is represented by the blockchain-based token BUIDL, backed entirely by cash, United States Treasury bills, and repurchase agreements, and will offer yield distributed via blockchain daily to token holders.

Additionally, BlackRock has made a strategic investment in asset tokenization company Securitize. However, the specific terms of the deal have not been disclosed.

Securitize will serve as both a transfer agent and tokenization platform for the fund, with BNY Mellon acting as the custodian for the fund’s assets. Anchorage Digital Bank NA, BitGo, Coinbase, and Fireblocks are also involved in the fund’s ecosystem.

“This is the latest progression of our digital assets strategy,” said Robert Mitchnick, Head of Digital Assets at BlackRock, in a written statement. “We are focused on developing solutions in the digital assets space that help solve real problems for our clients, and we are excited to work with Securitize.”

BlackRock Enters Tokenization Arena Amid Growing Interest in RWA Tokenization

With the introduction of its latest tokenized asset fund, BlackRock joins other major players from traditional finance, such as Citi, Franklin Templeton, and JPMorgan, in exploring the field of tokenization. Tokenization of real-world assets (RWA) involves creating blockchain-based tokens for traditional investments like bonds and funds. This practice is gaining momentum as digital assets and traditional finance continue to converge.

Tokenized United States Treasuries alone expanded from $100 million in early 2023 to $720 million, as reported by tokenized RWA analytics company RWA.xyz. This growth reflects the efforts of cryptocurrency-related firms aiming to generate a consistent yield by allocating their on-chain funds.

Earlier this year, in an interview with CNBC, Larry Fink, CEO of BlackRock, expressed his belief that tokenization has the potential to address issues related to money laundering and other forms of corruption.

He also discussed the launch of BlackRock‘s spot Ethereum exchange-traded fund (ETF), saying, “I see value in having an Ethereum ETF. These are just stepping stones towards tokenization, and I genuinely believe this is the direction we’re heading.”

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About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at [email protected]

Alisa Davidson